Since the emergence of “Modern Portfolio Theory” and the “Capital Asset Pricing Model” in the late 1960s, institutional investors have taken a quantitatively driven approach to portfolio construction, looking to create portfolio diversification and obtain better risk-adjusted returns by balancing their asset-class exposures. This journey has seen several important advancements in thinking about how to optimally achieve desired results.
Funds that want to take the total portfolio approach first need to get the total portfolio view. To do that they not only need data – and lots of it – but a rock-solid understanding of exactly how they’re going to use it.
Revolution AM adds PM
Pratik Joshi joins Revolution as a portfolio manager from Bank of America (BofA) in Sydney where he managed a “substantial” asset backed securitisation portfolio across asset classes in his role as vice president – asset backed securities.
“We are delighted to welcome Pratik to the Revolution Asset Management team,” said Revolution CIO Bob Sahota. “His extensive experience and impressive track record in private debt portfolio management and deal origination make him an ideal addition to our firm, as we continue to serve our clients and expand our footprint in Australia and New Zealand.”
Prior to BofA, Joshi spent four years in the structured finance group at Moody’s Investor Services as a lead analyst and business head of Moody’s Analytics. He also held front office origination roles at HSBC Australia in project financing, L&T Infrastructure Finance in debt capital markets, and Yes Bank Limited in institutional banking.
“I am very excited to take on this role which allows me to put my knowledge and extensive deal experience across structured and corporate finance to work,” Joshi said. “Senior secured private debt is an exciting investment opportunity that offers investors enhanced capital stability and diversification, and I look forward to being part of a trusted team committed to delivering value for our investors throughout the entire credit cycle.”
Revolution is currently raising for its Private Debt Fund II. It currently has around $2.6 billion of committed capital across its two private debt strategies, sourced from a blend of wholesale, institutional and family office investors. UniSuper handed down a chunky mandate to Revolution in April after it was introduced to the manager by Australian Catholic Super prior to its merger.
“In my career, I’ve never been through a more thorough process,” Sahota told ISN at the time. ”(UniSuper) don’t do anything lightly, and I think it’s a big milestone for our business to get a client that is as bluechip as UniSuper. This asset class has become more attractive because it’s floating rate, and every investment is secured should we get into a period where there’s a slowdown in the economy.”
Back in August, Revolution said it was preparing for just such a slowdown amidst warnings from commentators that the market was heading for “the mother of all default cycles” but said that not all private debt strategies would fare the same in one.
“Ones that are more exposed to the cycle or which haven’t been as disciplined in constructing their private debt portfolios will come under more pressure in the next 12 months,” Sahota said. “But we’ve got the experience to manage through this coming period because in every deal and fundamental deal we’ve underwritten we’ve tested those for the down times.”
